Long Island Housing Market 2025: Sales Slow as Prices Soar and Inventory Tightens

Long Island Home Sales Stuck in Neutral as Prices Climb and Inventory Shrinks

It’s officially a tough time to buy a home on Long Island. If you’ve been house hunting this year and feel like you're sprinting on a real estate treadmill — you’re not alone. The latest numbers are in, and they’re telling a frustrating (but familiar) story: home sales are down, prices are up, and inventory is still playing hard to get.

According to a new report from Douglas Elliman and Miller Samuel, closed home sales on Long Island dropped a sharp 10.6% year-over-year in the second quarter of 2025. Buyers are tapping the brakes, and it’s not hard to see why.

Prices Keep Rising — and They’re Not Done Yet

While other parts of the country are starting to see home prices cool off, Long Island is still heating up. The median home price hit $725,000 in Q2 — that’s an 8.2% jump from last year.

Nassau County? Even hotter. The median price for a single-family home in June was $850,000, up $40K in just one month. And over in Suffolk County, homes hit $700,000 — the highest ever recorded.

So yes, if you're feeling priced out, you're not imagining things.

Inventory? Still Stubbornly Low

In case rising prices and high mortgage rates weren’t enough, Long Island buyers are also dealing with an extreme lack of homes for sale. The region only has 3.1 months of housing supply, well below the national average of 4.6 months. That shortage is fueling bidding wars — and not the friendly kind.

This marks the third straight year of declining inventory, and unlike some other parts of the country, Long Island hasn’t caught the supply wave. That means fewer options, fiercer competition, and, unfortunately, more stress for buyers.

Mortgage Rates: A Sliver of Hope?

Here’s the silver lining: mortgage rates may finally be drifting lower. Realtor.com expects rates to average 6.7% for 2025, potentially falling to 6.4% by the end of the year.

That’s not exactly “ultra-low,” but it's better than where we’ve been. And according to the National Association of Realtors, even a modest drop to 6% could bring 160,000 new buyers into the market, many of them first-timers finally able to afford a mortgage.

So, if you’re waiting on the sidelines — your time might be coming.

National Market: A Bit More Buyer-Friendly

Across the country, the real estate mood is starting to shift. Realtor.com’s latest forecast suggests that inventory is growing, prices are cooling, and we could be heading toward the most buyer-friendly market since 2016.

But here in the Northeast — and especially on Long Island — that’s not quite the case. Affordability issues and a persistent lack of inventory are keeping things tight, even as other regions (like the South and West) see more progress.

“Even with more homes on the market, buyer response has remained muted,” said Realtor.com Chief Economist Danielle Hale. “Affordability constraints continue to weigh on demand.”

The Bottom Line: A Market in a Holding Pattern

Long Island’s housing market is caught between high demand and low supply, with affordability pulling the emergency brake on what would otherwise be a lively selling season.

Until rates dip more noticeably and inventory rebounds in a meaningful way, don’t expect a dramatic shift. For now, it’s a market defined by hesitation — and a lot of wishful thinking from buyers waiting for relief.

Want to Navigate This Market Like a Pro?

Whether you're looking to buy, sell, or just sit tight until things calm down, staying informed is key. Connect with a local real estate expert who knows the ins and outs of the Long Island market and can help you make smart moves — even in uncertain times.

Tags: housing affordability, real estate trends, Long Island real estate, buyer’s market, mortgage rates, housing inventory, Douglas Elliman, home sales 2025, median home prices, Realtor.com forecast